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Life Insurance: Do you Really Need It?
Author: Andrew Regan
These days, it seems there are insurance policies available for just about everything: car insurance, home insurance, travel insurance, pet insurance, life insurance - the list appears to be endless. Some types of insurance, such as car insurance, are required by law if you intend to drive on the public highway, but for most individuals other forms of insurance are an optional extra.
However, its necessary to note that arranging insurance policies for other lifestyle items can provide you with peace of mind should something unfortunate happen. For example, taking out home-contents insurance can assist cover the cost of replacing your household goods, while pet insurance can cover the cost of veterinary bills and treatments. But perhaps one of the most necessary optional insurances you should consider is life insurance.
Whilst no one likes to think about death, life insurance - sometimes known as life assurance or term assurance is a policy which pays a lump sum in the event of the policyholders death, helping to protect loved ones and dependents against financial burden. Coming to terms with the loss of a loved one is never an easy thing to do, and the added financial burden can make it increasingly difficult to cope. However, a life insurance policy can assist cover such costs as mortgage repayments, salary replacement and childcare costs, paying off debts or even providing for future education for the kids. Moreover it can assist ensure your family can maintain the standard of living to which they were accustomed to.
Life insurance comes in various forms, the most common being level term, decreasing term, critical illness and family income benefit policies. Most are available as both single and joint life policies, with most policies including benefits such as paying out on the diagnosis of a terminal illness. If youre considering life insurance now, or in the future, its necessary to understand what each type of policy provides.
- Level term insurance is the most common form of life insurance and is designed to pay out a lump sum of money in the event of the policyholders death. The policy runs for a fixed term, normally a minimum of 10 years, and the sum assured is guaranteed, and remains unchanged throughout the life of the policy.
- Decreasing term life insurance is also known as mortgage protection cover and is regularly used to protect capital and interest payments on a mortgage. The sum assured decreases during the duration of the policy.
- Critical Illness insurance pays a lump sum if you are diagnosed with a specified illness, or suffer loss of limb and can be added to term insurance policies. The sum paid out by this policy can be used for any purpose.
- Family Income Benefit insurance pays a regular tax free income for your dependants throughout the remainder of the policy term. Payouts on this type of life insurance can be structured to correspond with changes in inflation, although benefits usually remain constant.
With the cost of life insurance premiums plummeting in recent years due to improved life expectancy and increased competition between policy providers, arranging a life insurance policy neednt mean breaking the bank or compromising on cover. Financial comparison sites can assist you to find the best deals on life insurance from premium prices to levels of cover and with only a few clicks, you can insure and safeguard your familys future for when youre no longer around.
Article Source: http://www.articlesbase.com/insurance-articles/life-insurance-do-you-really-need-it-120720.html
About the Author:Andrew Regan is an online, freelance journalist.
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Keywords:
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